• May 12, 2021
Minister David Clark (right) and Retail NZ chief executive Greg Harford. Photo: Nikki Smith
Changes to merchant fees announced today will save New Zealand businesses $74 million, says Commerce and Consumer Affairs Minister David Clark.
Mr Clark announced the Government’s decision today to reduce merchant and regulate interchange fees charged to businesses.
“The high cost of these fees added financial pressure on businesses at a time when they are dealing with the economic impacts of COVID-19," says Mr Clark.
The current merchant service fees are unregulated and add significant overheads for businesses, who in turn pass those high costs onto consumers, says Mr Clark.
Mr Clark says before Covid-19 EFTPOS was the favoured payment method for goods and services in New Zealand, but post-Covid consumers prefer contactless debit and credit cards.
The interchange fee - a main component of the merchant fee - will be capped at 0.8 per cent, in line with Australia.
The owner of Sierra cafe in Auckland CBD, Khemony Kim, says the price reduction is an exciting improvement.
“I don’t charge a surcharge for credit cards, but my food prices have had to go up,” says Mr Kim.
"Now I might get to reduce the prices of my food, which is really great.”
Amanda Brown, owner of Snickel Lane Florist in Auckland CBD, says that her business was forced to introduce Paywave due to Covid-19, an added expense in an already tough time.
She says while it’s good the Government is taking action, it should have been done a long time ago.
The Government aims to introduce merchant fee reductions in mid 2021, with the full regulatory regime coming into effect next year.